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Microsoft Excel and Financial Modeling - Global Survey Results (July 2011)

Over 320 Microsoft Excel & Financial Modelers worldwide.

For more information and survey data:

www.vumero.com/blog

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Microsoft Excel and Financial Modeling - Global Survey Results (July 2011)

  1. 1. Market  Survey:   Insights  into  the  users  of  Spreadsheets  and  Financial  Models     Summary  Presentation     July  2011  
  2. 2. ¡  Financial  models  are  crucial  to  the  understanding  and   decision  making  of  many  industries  ¡  Most  prevalent  in:     ¡  Professional  services   ¡  Infrastructure   ¡  Sharemarket   ¡  Logistics  and  procurement   ¡  Strategy   ¡  Industrial  operations  processes   2  
  3. 3. ¡  The  report  sought  to  develop  a   deeper  understanding  of    the   processes,  practices  and  behaviours   underpinning  the  use  of  spreadsheets   and  financial  modeling    ¡  The  survey  examined  the  preparation,   resource  sharing,  capabilities  and   perceived  risks  of  over  300  financial   model  users  worldwide       3  
  4. 4. ¡  52%  of  respondents  first  search  Google/Internet  for  modeling   assistance,  almost  double  the  number  who  turn  to  wok  colleagues  ¡  34%  built  between  4-­‐10  financial  models  per  year  ¡  Large  organisations  (1000  people+)  appear  to  be  more  reliant  on   financial  modeling      ¡  86%  of  respondents  would  be  willing  to  spend  at  least  5  minutes   searching  for  a  financial  modeling  example    ¡  56%  of  respondents  say  that  the  majority  of  their  financial   modeling  knowledge  is  self  taught     4  
  5. 5. ¡  Almost  half  of  the  respondents  were  willing  to  modify  an  existing   model  that  is  only  “50%”  of  what  they  required  ¡  46%  of  models  take  between  1-­‐5  days  to  build  (e.g.  ≤40  hours)  ¡  “Scope  for  error”  is  one  of  the  largest  problems  faced  by  financial   modelers  ¡  Only  53%  of  respondents  are  “confident”  or  “very  confident”  their   models  are  free  from  serious  material  errors   5  
  6. 6. Which  best  describes  the  field  you  work  in?   How  large  is  the  organisa/on  you  work  for?   45.0%   40.0%   38.6%   Education   Government   5%   2%   35.0%   30.0%   25.0%   Industry   29%   20.0%   17.2%   15.0%   12.4%   11.7%   11.7%   10.0%   8.3%   Professional   Services   5.0%   64%   0.0%   Self-­‐Employed   <10  People   >1,000  People   200  to  1,000  People   50  to  200  People   10  to  50  People   6  
  7. 7. Where  have  you  developed  most  of  your  financial   Which  of  the  following  best  describes  you?     modeling  knowledge?   (Only  answer  one)   External  training   5%   70.0%   61.9%   60.0%   Training   50.0%   provided  by   employer   38.1%   40.0%   23%   30.0%   Self-­‐taught   20.0%   High  school  and/ 56%   or  University   10.0%   16%   0.0%   I  understand  the  technical  side  of   I  understand  the  commercial/ financial  modelling   business  side  financial  modelling   7  
  8. 8. Per  year,  how  many  projects  /  transac/ons   Within  your  role,  how  much  of  your  /me  is   require  you  to  undertake  a  significant  level  of   spent  financial  modeling?     financial  modeling?  40.0%   40.0%   34.4%  35.0%   35.0%  30.0%   28.2%   30.0%  25.0%   25.0%   20.2%  20.0%   17.2%   20.0%  15.0%   15.0%  10.0%   10.0%   5.0%   5.0%   0.0%   1-­‐3  models   4-­‐10  models   10-­‐20  models   >20  models   0.0%   0-­‐10%   10-­‐30%   30-­‐50%   >50%   8  
  9. 9. When  building  a  financial  model,  how  much   Within  your  organisa/on,  can  you  easily   /me  pressure  are  you  under?   access  useful  financial  model  examples?   40.0%   34.0%   33.7%   Extreme   5.1%   35.0%   30.0%   Significant   38.7%   25.0%   20.0%   17.9%   14.4%   Some   50.7%   15.0%   10.0%  Li@le  or  none   5.5%   5.0%   0.0%   0.0%   10.0%   20.0%   30.0%   40.0%   50.0%   60.0%   No   Limited  amount   Some   Lots   9  
  10. 10. Do  you  spend  any  /me  searching  for  relevant   Where  do  you  first  seek  help  if  you  have   examples  to  help  you  get  started?   problems  with  Excel  or  financial  modeling?     60.0%   51.7%  Occasionally   50.0%   40.0%   No   30.0%   27.2%   20.0%   12.9%   8.3%   Yes   10.0%   0.0%   0.0%   10.0%   20.0%   30.0%   40.0%   50.0%   60.0%   Colleague  at  work   Friend   “Help”  menu   Google/internet   10  
  11. 11. Which  best  describes  the  kind  of  financial   How  long  would  you  be  willing  to  spend   modeling  you  typically  do?     looking  for  an  appropriate  financial  model   example?   35.0%   33.0%   30.0%   27.1%   25.4%   25.0%   Building  50:50   financial   20.0%   44%   models  from   scratch   15.0%   40%   10.0%   8.2%   6.2%   5.0%   0.0%   Working  with   I  wouldnt   1-­‐5  minutes   5-­‐20  minutes   20-­‐60  minutes   UnYl  I  find   exisYng   what  I’m   financial   looking  for   models   16%   11  
  12. 12. How  comfortable  are  you  modifying  a   In  order  for  a  financial  model  example  to  be   colleague’s  financial  model?   relevant  and  useful  to  you  as  a  basis  for   building  a  new  financial  model,  how  much   Extremely   Not  at  all   of  it  would  you  be  willing  to  modify?     6%   comfortable   50.0%   20%   45.0%   43.3%   40.0%   35.0%   I  can  if  I  have  to   30.0%   34%   25.0%   22.3%   20.0%   15.0%   12.0%   12.7%   9.6%   10.0%   Comfortable   40%   5.0%   0.0%   10%   20%   30%   40%   50%   12  
  13. 13. What  is  your  biggest  dislike  or  problem  with   When  building  a  model,  how  confident  are   financial  modeling?     you  that  it  is  free  from  serious  errors?   My  lack  of   knowledge   Other  (please   specify)   14%   50.0%   22%   44.5%   45.0%   40.4%   40.0%   Takes  too  long   35.0%   15%   Lack  of   30.0%   supervision   25.0%   5%  Too  much  to  do   20.0%  for  one  person   Boring  and   tedious   15.0%   5%   3%   8.6%   10.0%   6.5%   5.0%   Too  much   scope  for   0.0%   Not  very   Moderately   Confident   Very  confident   error   36%   13  
  14. 14. Wastefulness   Distrust   82  mins   50%   Average  time  an  Executive  might   Reported  major  regular  errors  in   spend  per  day  searching  for  needed   financial  models,  including  finding  out-­‐ information   of-­‐date  information  frequently   10%  per  day   25%  Average  time  workers  spend  looking   for  the  information  they  need  to   Business’  trust  information  contained   perform  a  task  or  make  a  decision   in  financial  models   14  
  15. 15. ¡  What  are  the  best  methods  for  teaching  financial  modelers?  ¡  How  can  greater  transparency  and  efficiency  be  introduced  into   the  financial  model  review  process?  ¡  Which  industries  and  communities  can  benefit  most  from   understanding  the  benefits  of  financial  modeling?  ¡  How  can  key  stakeholders  better  understand  the  risks  associated   with  poor  subject  knowledge  and  “bad”  modeling?  ¡  Are  there  better  ways  to  share  financial  modeling  knowledge?  ¡  How  can  business  intelligence  better  leverage  the  power  of  Excel?   15  

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